ARKANSAS, USA — In their diversity report, the Northwest Arkansas Council says that an average of 30 new people are moving to the region every day. Experts explained that this growth is putting a strain on our housing market with a low supply of houses in the area.
The latest Arvest Skyline report showed that the average Northwest Arkansas home price has reached nearly $400,000, up 27% from 2021.
Mike Warner of Lindsey and Associates has worked in the Northwest Arkansas real estate market for nearly two decades. The designated executive broker remembers the housing price drop during the great recession of 2008 and most recently, the growth of the area which is revealing itself in the housing market.
"Over the last few years, two years, in particular, we've seen a tremendous price increase and lack of inventory," said Warner. "The lack of inventory has caused multiple offers because we still have a lot of demand and it's really driven the prices up."
Rigo Mendoza moved to the area five years ago from Pennsylvania, initially moving there from Mexico. A job opportunity brought him to the area along with the quality of life the area presented. He felt the lack of inventory after looking to move here, ultimately deciding to build a new home in Bentonville to accommodate his three children and wife.
"Here it is, you know, one of the fastest-growing areas in the country," said Mendoza. "And the big difference is how the availability of houses comes and goes. When I say that is you can come and, you know, see a house that you want to buy. And three hours later you want to make an offer, but you realize that that house has already 10 or 15 different offers and they're making a decision on the spot."
To demonstrate the rising prices of houses in the area, Warner demonstrated the cost of a 4-bedroom single-family home in Bentonville off SW Regional Airport Blvd. In 2011 it sold for $258,000, then in 2015 it sold for $274,00. Now in July, it sold for $506,000, double the price it was 10 years ago.
With prices rising, it can cause concerns of gentrification, where everyone wants to move to an area that pushes essential workers out. Duke McLarty was appointed executive director of the Workforce Housing Center in 2021, after the Northwest Arkansas Council decided to address affordable housing issues. When asked if it was happening in the area or what we are doing to not have that, McLarty said it was real in the Northwest Arkansas area.
"It's not whether that can happen, it is happening," said McLarty. "I think of our workforce as really the backbone, I mean, the spine of our region. And those folks who are in critical roles for all of our day-to-day lives, are being committed to further commutes. They're being committed to housing prices, that when they take took that role, they didn't expect. And the end result is they're spending a lot of time commuting, they're spending a lot of money on transportation costs, just to get to and from a home that they can afford. And that is the Workforce Housing Center is laser-focused on creating housing options for our workforce."
The solution for this situation many would agree is more inventory for the housing market. The pandemic, however, slowed down the world and supply chain, McLarty said that has been difficult to keep up with demand.
"It is my hope that with as we move from the pandemic, some of the material side prices start to come down and start to stabilize," said McLarty. "When that happens, I think we as a region need to be ready, and we need to have the rules in place. So that development can really start to pick up at that time."
The Workforce Housing Center is specifically working to bring more people into cities and not out.
"We feel that our land in kind of the main municipalities primarily along the 49 corridor needs to be put to a better use, before we continue to expand outwards with our housing," said McLarty. "The cities and their zoning have not been significantly kind of reexamined and rethought in some instances since their zoning was put in place."
As both transplants and locals explain, that change is coming to the area.
"The reality is our region is going to nearly double in the next 20 years," said McLarty. "So now is the time for us to think strategically about where that growth is going to happen and what this region is going to look like when the next 10,000— When the next 650, one-thousand new residents from Northwest Arkansas arrive. And at the Workforce Housing Center, we feel like [NWA] really needs to include housing options for everyone in every community."
"Change is one of those things that divides people. Some people like status quo, not challenging things, not moving things away, not building new things. And some other people like change because it drives different opportunities. So you will never have like one single opinion," said Mendoza.
McLarty said the Workforce Housing Center is already working to inform developers what kind of housing can best handle the growth. The executive director also points out a need for updated infrastructure as more people make their way to Northwest Arkansas.
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